Over the past year the Subcontinent’s IT Services Sector has grown to $181 Billion, making up nearly 45% of total service exports and contributing 7.7% to GDP: and as if that wasn’t enough India is locked, loaded and ready to step up another gear as it embraces new technology paradigms like Blockchain and AI, with a slew of small to medium-sized businesses based around Bangalore already reskilling to reflect India’s increasing importance as a global technology hub. In every sense of the words, India has become a technology superpower.
And where it was once synonymous with low cost, outsourced software, India is now spearheading global innovation as well. So what’s behind this sudden step-change, turning an essentially outsourced software backwater into a world leader?
Well, first and foremost don’t underestimate the importance of the subcontinent’s youthful demographic: one of the largest in the world and as devoted as young people anywhere to their iPhones and social media platforms. India currently has more than half a billion Internet subscribers and according to Mckinsey, this will create e-commerce and digital supply chain worth $35 Billion annually within the next six years. The fact most youngsters would seemingly rather lose a limb than their iPhone has a lot to do with that: they provide the raw collective drive for IT innovations of the type India is going through at the moment and it would be foolish to underestimate their potential.
Added to that India also has a thriving start-up an ecosystem where Government incentives are now attracting Foreign Direct Investment (FDI) like never before, with training programmes and a regulatory infrastructure that is genuinely supportive of digital growth: precisely what those thousands of small to medium-sized businesses in and around Bangalore. The Modi Government has also identified IT as one its twelve so-called Champion Service Sectors and its policy think tank, the snappily named NITI AAYOG, has just announced a national programme for mainstream adoption of AI across all Indian business.
Then there is the Government’s new Blockchain pilot project for Social Welfare, working with prominent healthcare providers such as Apollo Hospitals and Strides Pharma to tackle the increasing problem of counterfeit pharmaceuticals on the subcontinent and provide greater support for government based welfare schemes.
In short, there can be no doubting the Government is putting money and considerable effort into where its mouth is…
Just look at the recent success stories: Flipkart, Ola, PayTM and Oyo all of which have grown to multi-million dollar businesses over the last decade, and some of them over a considerably shorter period. And these Indian Unicorns already have their eyes and horns on international markets, with Ola recently expanding into Australia and Oyo set to follow in its wake.
Oracle India’s CEO, Shailender Kumar, recently predicted potentially explosive growth if India’s IT service companies were to combine with these new technology titans: unlocking fresh business opportunities in an increasingly ambitious and near white-hot environment.
And he’s right… just imagine what’s coming next!
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Executive Overview
Most economic commentators would identify Blockchain and AI as the key drivers of future radical change in international labour and capital markets, and I think they’re right: so it really is impossible to underestimate the stark potential of India’s resurgent IT sector given it is focusing precisely on those two areas, with increasingly decisive support from the Modi Government in the form of training and regulatory initiatives.
No wonder then that FDI into Indian technology is currently running at an all-time high, and small surprise IT comprises such a significant part of Indian GDP. IT will be a powerhouse for economic growth.
These are exciting times and they are creating unrivalled investment opportunities: we will all be watching carefully to see what happens next.